Bank of Spain Gets New Governor as ECB Prepares to Cut Rates Again

By Joshua Kirby

Spain appointed a close ally of Prime Minister Pedro Sanchez to govern its central bank, filling a vacancy left empty for close to three months.

Jose Luis Escriva will take charge of the central bank of the eurozone's fourth-largest economy, finance minister Carlos Cuerpo told the Spanish parliament Wednesday. The position also comes with a seat on the European Central Bank's governing council.

While he has no party affiliation, Escriva has for the last four years been a minister in the government of Sanchez. He replaces Pablo Hernandez de Cos, whose term as governor expired in June.

The new governor will play a leading part in forming eurozone monetary policy, as well as regulating Spain's domestic banking sector, Cuerpo said.

The 63-year-old Escriva takes the reins of Spain's central bank barely a week before the ECB's policymakers meet to decide whether to cut rates again, following June's move to lower its benchmark rate by 25 basis points. Markets are convinced that the central bank will cut rates by another quarter-point in an attempt to inject some lifeblood into the currency union's anaemic recovery.

Before joining the government, Escriva worked in policy at both the ECB and the Bank of Spain, and was also employed at commercial lender Banco Bilbao Vizcaya Argentaria, or BBVA.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby